Investing in student digs

Student accommodation has been one of the most resilient property sectors since the property fall out in 2008.  This insightful guide to the student accommodation sector by Knight Frank paints a pretty positive picture of investment in the sector.  I'm less sure particularly on so called Purpose Built Student Accommodation (PBSA).  I can see how they are attractive for students and probably produce a greater chance of above average rental returns but what the figures don't tell you is the risk of obsolescence.  What do I mean by this?  Well what happens if your lovely purpose built student accommodation block in 10 years time is no longer in demand because it's in the wrong place or the market is over supplied?  What can you use the building for....not an awful lot without spending a fortune.  On the other hand a converted residential property should reconvert to single occupancy residential use pretty easily.  If you believe in the student accommodation growth story then have a look at the property below.  I note that it's only 80% so perhaps the oversupply scenario I've mentioned is closer than some of the analysts like to admit.

Athena Apartments, 52 Grange Lane, LEICESTER, LE2 7EE

Description

    •    Purpose built, modern student block
    •    73 bed spaces arranged within 26 flats
    •    59 rooms let subject to Assured Shorthold Tenancies
    •    80% occupancy rate
    •    Prominent student location situated on the De Montfort University Campus
    •    Located within 1 mile of Leicester train station
    •    £30,822 per bed space
    •    Estimated Rental Value assuming all rooms let on a 48 week basis: £335,252

Price
Offers in excess of £2,250,000

Contacts

James Wilson
+44 (0)113 236 6679
james.wilson@allsop.co.uk
William Shoebotham
+44 (0)20 7344 2659
william.shoebotham@allsop.co.uk

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